United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
JOHN J. THARP, Jr., District Judge.
Everton Henderson filed this action against Blitt & Gaines, P.C., ("Blitt & Gaines") for violating § 1692i(a)(2) of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. Henderson alleges that Blitt & Gaines conducted abusive forum shopping when it filed a garnishment action in a venue where Henderson did not reside. Currently pending before the Court is Blitt & Gaines' motion to dismiss the complaint for failure to state a claim. The motion presents a single issue: whether an action to garnish wages is an action "against the consumer" so as to bring the FDCPA's venue provision into play. Concluding that a garnishment action is an action against the third-party employer, not the consumer/employee, the Court grants the motion to dismiss with prejudice.
Everton Henderson resides in Waukegan, Illinois.Compl., Dkt. 1, at ¶ 13. Blitt & Gaines, P.C., is a law firm that regularly uses the mails or the telephone to collect, or attempt to collect, delinquent consumer accounts. Id. at ¶ 6.
On July 29, 2011, Blitt & Gaines filed a suit (the "collection action") against Henderson in the Circuit Court of Cook County, Illinois, in an attempt to collect an unpaid consumer debt Henderson allegedly owed to Credit Acceptance Corporation. Id. at ¶¶ 7-8. The collection action was filed at the Richard J. Daley Center Courthouse, which serves Cook County. Id. ¶¶ 9-10. Waukegan, Illinois, where Henderson lives, is within Lake County and is served by the Circuit Court of Lake County. Id. at ¶ 14. The collection action resulted in a judgment against Henderson. On December 23, 2013, Blitt & Gaines filed an affidavit for wage deduction (the "wage garnishment action") to enforce the judgment entered in the collection action. Blitt & Gaines also filed this wage garnishment action at the Richard J. Daley Center Courthouse in Cook County, rather than the Circuit Court of Lake County. Id. ¶ 28.
Henderson then filed suit against Blitt & Gaines in this Court, alleging that Blitt & Gaines violated the FDCPA by filing the wage garnishment action in a county where Henderson did not reside. Blitt & Gaines has filed a motion to dismiss, arguing that a wage garnishment action is not an action against a consumer under the FDCPA.
The relevant provision of the FDCPA provides: "Any debt collector who brings any legal action on a debt against any consumer shall... bring such action only in the judicial district or similar legal entity-(A) in which such consumer signed the contract sued upon; or (B) in which such consumer resides at the commencement of the action." 15 U.S.C. § 1692i(a)(2).
The parties agree that Henderson qualifies as a consumer, that Blitt & Gaines qualifies as a debt collector, that an affidavit for wage garnishment is a legal action on a debt within the meaning of the FDCPA, that the wage garnishment action at issue was not filed in a judicial district in which Henderson signed the contract sued upon or in which he resided, and that the FDCPA venue provision applies only to legal actions brought against a consumer. The parties' dispute, then, is narrow: whether a wage garnishment action is a legal action on a debt against a consumer within the meaning of the FDCPA. Blitt & Gaines maintains that a wage garnishment action is not an action against the consumer but rather an action against the third-party employer. In response, Henderson argues that a wage garnishment action is against both the consumer and the employer, Resp., Dkt. 15, at 12, and is therefore subject to the venue provision of the FDCPA.
The parties agree that the statutory text does not define the term "against the consumer" and so does not answer the question of whether a wage garnishment action is against the consumer or the third-party employer. See also Smith, 714 F.3d at 75 ("The text of the FDCPA provides no definition of that phrase and thus no guidance on the issue."). Accordingly, the issue turns on the nature of the state law garnishment action; the court must consider whether Illinois law treats a wage garnishment action as an action against the debtor or against the employer. Blitt & Gaines argues that in Illinois, wage garnishment actions are against the third-party employer and not the consumer; and that the FTC's commentary to the FDCPA supports a finding that a wage garnishment action is not subject to the venue provision. Henderson counters that because a garnishment action targets the consumer's wages, and because Illinois law requires that judgment creditors provide notice of garnishment actions to debtors, a wage garnishment action in Illinois is at the very least a hybrid action against both the garnishee (the employer) and the consumer. Holding otherwise, he maintains, would thwart the purpose of the FDCPA.
Illinois law defines wage garnishment actions as supplementary proceedings prosecuted for the purpose of enforcing a judgment already entered. See 735 ILCS 5/2-1402(a). As in all civil actions in Illinois, the general provisions of the Illinois Code of Civil Procedure apply to wage garnishment proceedings except as otherwise provided by other statutes specifically governing wage garnishment actions. See id. at 5/1-108(a)-(b). Illinois Supreme Court Rule 277 is a separate rule that further governs wage garnishment actions, and to the extent Rule 277 governs procedure, it controls. Id. at 5/1-108(b); see also In re Riverwoods Park Dist., 247 Ill.App.3d 702, 706, 617 N.E.2d 464, 467 (Ill.App.Ct. 1993); Bank of Hickory Hills v. Hammann, 108 Ill.App.3d 834, 838, 439 N.E.2d 1048, 1052 (Ill.App.Ct. 1982). Rule 277 expressly distinguishes between an action against a third party and an action against a judgment debtor and prescribes different venue rules as to each, a fact that undermines Henderson's theory that a garnishment action is a "hybrid" action against both: "A supplementary proceeding against a third party must, and against the judgment debtor may, be commenced in a county of this State in which the party against whom it is brought resides...." ILCS S.Ct. R. 277(d). An employer of the judgment debtor is indisputably a "third party" under the rule, which it defines to include anyone other than the judgment debtor who is "indebted to the judgment debtor, " ILCS S.Ct. R. 277(a), so there can be no dispute that an employer of the judgment debtor is a "third party" under subparagraph (d). It follows, then, that Rule 277 must be read to provide that an action to garnish wages that an employer owes to a judgment debtor is an action against the employer rather than against the judgment debtor.
Article XII of the Illinois Code of Civil Procedure imposes additional procedural requirements for wage garnishment actions. See 735 ILCS 5/12-801, et. seq. The summons in a wage garnishment action is issued against the employer only and imposes upon the employer a duty to respond, in writing and under oath, to interrogatories designed "to elicit all the information necessary to determine the proper amount of non-exempt wages." Id. at 5/12-805(a); see also ILCS S.Ct. R. 277(b) (providing that "[t]he supplementary proceeding shall be commenced by the service of a citation on the party against whom it is brought"). The judgment debtor is entitled to receive a wage deduction notice and the employer's completed interrogatories. Id. at 5/12-805(b). Both the judgment creditor and the debtor each have the right to contest the truth or sufficiency of the employer's answer, and the judgment debtor may request a hearing to dispute the wage deduction if it includes wages the debtor believes are exempt. Id. at 5/12-811(a)-(b). A successful wage garnishment action results in a judgment entered against the employer and a lien on wages due to the judgment debtor/employee. Id. at 5/12-808(b), (e). The costs of the wage garnishment proceedings are charged to the judgment debtor unless the court determines that costs incurred by the judgment creditor were improperly incurred. Id. at 5/12-814(a).
The requirements outlined above compel the conclusion that garnishment proceedings are actions against the third-party employer rather than against the debtor/employee. First, wage garnishment actions must be commenced in the venue where the third party resides, regardless of where the judgment debtor resides. See ILCS S.Ct. R. 277(d). Second, the summons imposes an affirmative duty on the employer to act: the employer must respond to the summons, answer a series of interrogatories, and ensure the judgment debtor receives a copy of the necessary notice materials. Id. at 5/12-805(a)-(c). Third, and by contrast, a garnishment proceeding imposes no duties or obligation on the judgment debtor; the judgment debtor is neither required to respond nor to become involved in the proceedings whatsoever. See id. at 5/12-811(a). Fourth, if the judgment debtor seeks to participate in the garnishment proceeding, it is only permitted to litigate the issue of wage exemption, not the validity of the underlying debt. Id. at 5/12-811(b). Fifth, the judgment that results from wage garnishment proceedings is entered against the employer, rather than the consumer. Id. at 5/12-808(b). Finally, the relevant rule governing such actions describes the proceeding as being "against" the employer. See ILCS S.Ct. R. 277(a).
Henderson points to the provisions requiring notice and permitting limited participation by debtors to support his characterization of garnishment proceedings as actions against the consumer. These provisions, which date back to amendments enacted in 1990, include requirements to provide judgment debtors with notice of, and the right to participate in, wage garnishment proceedings. See Act of Sept. 6, 1990 (the "1990 Amendments"), Pub. Act 86-1268, 1990 Ill. Laws 2197. The 1990 Amendments, for example, gave judgment debtors the right to contest the truth or sufficiency of the employer's answer and provided that "no deduction order shall be entered in favor of the judgment creditor unless the affidavit filed by the judgment creditor certifies that a copy of the wage deduction notice has been mailed to the judgment ...